Action Steps for HVAC Pros and Facility Managers in a Tough Economy

First, the bad news: The economic crisis is continuing to unspool in what economist and journalist Robert Kuttner recently dubbed “the Great Collapse” (The Boston Globe, March 12). And this is raising a host of questions about what it all means for every sector and segment of the business world — including that of facilities management.

Battered by the U.S. economic recession, the commercial real estate market is struggling to maintain values across all property types and geographic areas, kicking a growing number of investors into survival mode as they painfully watch the value of their existing portfolios decline, according to investors and real estate professionals surveyed as part of the first quarter 2009 PricewaterhouseCoopers Korpacz Real Estate Investor Survey.

Real estate investors do not expect a rebound in any of the commercial real estate sectors until well into 2010, according to the survey. In the meantime, property owners are faced with limited financing options, declining tenant demand, rising overall capitalization rates, and deflated confidence. They are looking to protect the value of their existing properties in order to compete and survive in an increasingly challenging environment.

Sounds pretty serious, doesn’t it? Knowing that this issue is of direct interest to our audience, we turned our roving eye and ear to the spectacle and buzz of the Internet and found the following things being said that may be of equal interest to our faithful readers with their ongoing interest in all-things-HVAC.

It’s these things, not incidentally, that constitute the good news, since they give us all concrete information and action steps we can use at a critical junctures like the one we find ourselves at now.

TOUGH DECISIONS

On March 19 FMLink reprinted a pertinent article from Facilities Management Journal, the publication of the Association for Facilities Engineering (AFE), titled “Facility Maintenance Requires Tough Decisions When the Economy Falters.” Its author, Lou Ronsivalli, the Service Offer Solutions Leader for Trane Systems, points out that “we are operating in an unprecedented economic environment” whose implications are nothing short of shocking:

[O]wners of commercial, municipal, institutional and industrial buildings are confronting capital and operating budget challenges. They are seeking ways to cut costs without sacrificing impact on occupants and stakeholders, in most cases deferring all non-critical expenses; and they’re seeking ways to stretch the life of their building systems a little further. Sometimes such measures are taken to contribute to the bottom line; sometimes it’s a matter of survival.

He then points out that even though times are tough, deferring necessary maintenance can result in a host of unpleasant outcomes, including more unplanned breakdowns and high emergency service expenditures, reduced comfort and increased safety and health risks to building tenants, degradation of building systems efficiency, and decreased lifespan of equipment.

To address the issues he has raised, Ronsivalli offers “A Strategy for Building Owners in Tough Times” that offers a six-step method of identifying, prioritizing, and addressing areas of needed maintenance. It’s really useful and we advise that you read it.

“The current economic climate may be daunting to some, but that shouldn’t keep anyone from appropriately managing any possible risk to their business or their assets,” Ronsivalli writes. “Resources are tight, but many options exist for addressing your building’s needs and for investing in efficiency measures to increase your building’s future value.”

THE CENTRALITY OF HVAC

FacilitiesNet is featuring a great four-part feature article by James Piper, P.E. that, while it doesn’t mention the economic situation specifically, argues forcefully for the absolute centrality of proper preventive HVAC maintenance for heading off a host of problems.

In “Staying One Step Away from HVAC Trouble” (March 2009), Piper focuses on the fact that “most facility organizations today still operate in a reactive mode” instead of taking proactive steps to head off problems. He then makes a strong case for the claim that “This approach to maintenance with respect to HVAC systems is particularly troubling given the role that HVAC systems play in today’s facilities,” since HVAC systems not only account for a full 40 percent of a building’s full energy use but are directly responsible for maintaining the health of both the people and the equipment that inhabit a typical commercial building. “Sometimes the difference between keeping a business running and having to shut down is nothing more than proper HVAC system maintenance,” writes Piper.

Piper devotes the rest of the piece to talking about specifics, from the need to keep an eye on chillers to the need to pay special attention to IAQ.

BEST PRACTICES

Fluke Corporation, “the world leader in the manufacture, distribution and service of electronic test tools and software,” has published an “application note” titled “Save money with best practices and an energy inspection checklist” (pdf). They announce the economically driven motivation behind this publication right on the first page:

With the economic downturn, many facility managers are facing very tight operation and maintenance budgets. Luckily, many facilities are sitting on multiple energy conservation opportunities that can save thousands of dollars per year with relatively little capital investment.

The publication then focuses entirely on showing how facility managers can save energy and money by implementing effective maintenance practices for HVACS systems, lighting systems, and building automation systems.

Fluke gives special attention to HVAC, pointing out that

If capital expenditures at your facility for new HVAC mechanical equipment have been frozen or eliminated, one way to free up financial resources is to tune up existing HVAC equipment. Follow best maintenance practices and the increased operating efficiency will reduce energy consumption. Cumulative energy bill savings can then supplement the general budget.

SURVIVING THE GAME

Kuttner finished his Boston Globe op-ed by asking, “Can America recover from a Great Collapse? Can we avert a second Great Depression?” and then answering, “To coin a phrase, yes we can. But we need the right strategies and we don’t have much time.”

Take this combination of caution, optimism, and pragmatism and bring it to bear on the current tensions in the commercial real estate market and the facility management world, and you have a recipe for a very productive and helpful response indeed.